Helping Federal Student Loan Borrowers Manage Debt, Repay Loans


We’ve been telling you that new data shows that a lower percentage of students are defaulting on federal loans.

That’s great news for students, taxpayers and our economy. But we know there is still more work to do. We want every student to leave college without feeling burdened by their debt.

In the past few years, we’ve undertaken several new initiatives to help borrowers manage their debt and repay their loans.

Our financial aid counseling tool is now available. There is also extensive financial aid information on, including details on flexible loan repayment plans, which allow borrowers to repay their loans based on their income.

Also, as you probably remember, back in June President Obama directed Secretary Duncan to allow all federal student loan borrowers to cap their monthly payment amounts at 10 percent of their monthly income. We’ve begun to put that directive into effect, with the goal of making the new plan available to borrowers next year.

And thanks to a wide variety of outreach efforts, more than 2.5 million Direct Loan borrowers are currently enrolled in an income-driven repayment plan.

We’ve also recently renegotiated terms of the federal student loan servicer contracts to help federal student loan borrowers better manage their debt. We’ve created additional incentives for companies that service federal student loans to improve counseling and outreach to ensure borrowers select the repayment plan best-suited to their financial circumstances, reduce payment delinquency, and help avoid default.

And we’re taking steps to address growing concerns about burdensome student loan debt by requiring career colleges to do a better job of preparing students for gainful employment.

It is important to remember there are options for those who have defaulted, as well. There are resources and several options for getting back on track at

If you need help repaying your federal student loans, you can also always contact your loan service provider to learn about repayment options.

Remember: there is no application fee to consolidate student loans. Do not pay for services that the U.S. Department of Education offers for free!

Dorothy Amatucci is a digital engagement strategist at the U.S. Department of Education.

1 Comment

  1. “making the new plan available to borrowers next year”
    It doesn’t say when this article was written, so when is / was “next year”?

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